Western Australia Wine Producers Warn Bottle Deposit Expansion Could Raise Costs

Western Australia’s wine industry is warning that the planned expansion of the state’s Containers for Change scheme could increase costs for wineries and consumers, raising questions about how container deposit policies can balance recycling gains with business impacts in regional supply chains.

From 1 July 2026, wine and spirit bottles are due to become eligible under Western Australia’s 10-cent container refund scheme. The expansion will bring glass wine and spirit bottles, wine in plastic containers, sachets and casks, water in casks, concentrated fruit and vegetable juices, flavoured milk, and cordial into the scheme, provided containers fall within the eligible size ranges. Almost all beverage containers between 150 millilitres and 3 litres will then be accepted at refund points across the state.

The state government says the move builds on a program that has already lifted container recovery rates and diverted billions of containers from landfill. According to government figures, more than 5 billion containers have been collected since the scheme began in October 2020, while the container recovery rate has increased from about 34% before the scheme to 65% in the 2023-24 financial year. The government also says the scheme has supported hundreds of jobs and generated millions of dollars in donations for charities, schools, and community groups.

Industry Warns of Higher Bottle Prices

However, a newly formed industry group, Friends of WA Wine, is calling for a pause before wine bottles are added. According to ABC News, the group says the change could add up to $1.25 per bottle once new labelling, logistics, compliance, tax, distributor, and retail margin impacts are included.

The group argues that a winery levy of around 14 cents can compound through the supply chain before reaching consumers, even though the refund available to the customer is 10 cents per container. This means the final price impact could be higher than the face value of the refund, particularly once wholesale and retail margins are applied.

The concern is not only about the refund itself. Under the container deposit model, first responsible suppliers are required to pay fees linked to the containers they place on the Western Australian market. The WA government states that suppliers are charged for their share of scheme costs, including the 10-cent refund amount on redeemed containers, handling fees, logistics, and processing costs. Wine and spirit suppliers will also need to register eligible containers and report sales volumes.

Smaller Wineries Face Added Pressure

For smaller wineries, those administrative and operational requirements could be significant. ABC News reported concerns from producers that additional costs could cut into already tight margins, particularly for family-owned and regional wineries facing wage increases, insurance costs, softer wine demand, and broader industry pressure.

Friends of WA Wine says the expansion could place WA producers at a disadvantage compared with competitors in states where wine bottle inclusion is not scheduled on the same timeline. The issue is particularly sensitive because many wineries sell across multiple jurisdictions, each with different container deposit rules, reporting systems, and compliance expectations.

That complexity matters for regional producers with limited administrative capacity. Larger beverage companies may have dedicated compliance teams and established systems for container registration and reporting. Smaller wineries may need to absorb additional staff time, external advice, label redesign costs, and changes to ordering and distribution systems.

Government Argues Expansion Will Improve Circularity

The Western Australian government has framed the expansion as a practical step to increase recycling and reduce waste. It says adding wine and spirit bottles will capture more glass through refund points and support higher-value recycling outcomes.

Glass is central to the policy argument. The government says glass bottles already have the highest return rate of all material types in the scheme, at about 80%. It has also reported that around 39,000 tonnes of glass collected through refund points in the 2023-24 financial year was recycled into new bottles.

Supporters of the expansion argue that container deposit schemes create cleaner material streams than mixed household recycling. When glass is collected separately through refund points, it can be less contaminated and more suitable for closed-loop recycling into new bottles. This is important for circular economy policy because cleaner recovered materials can reduce reliance on virgin raw materials and improve the economics of recycled content.

The government also estimates that the expansion could add about 200 million eligible containers a year, including tens of millions of glass bottles. For policymakers, that represents a substantial opportunity to increase material recovery and strengthen local recycling systems.

Wine Sector Questions the Environmental Case

Wine producers, however, question whether the environmental gains justify the costs. Industry representatives cited by ABC News argue that wine bottles are not a major litter stream and that many are already recycled through existing household recycling systems.

That distinction is important. Container deposit schemes were originally designed to address beverage containers commonly consumed away from home, which are more likely to become litter or enter public waste streams. Wine is often consumed at home or in hospitality settings, where bottles may already be captured through kerbside recycling or commercial glass collection.

Friends of WA Wine has argued that the scheme should be redesigned or delayed to focus on practical glass circularity, consistent compliance across jurisdictions, and lower administrative burdens for producers. The group is not necessarily opposing recycling, but it is challenging whether the current policy design is the most efficient way to improve outcomes for wine packaging.

Practical Implications for Businesses and Consumers

If the expansion proceeds as planned, wineries supplying the WA market will need to prepare for registration, labelling changes, volume reporting, cost pass-through decisions, and customer communication. Retailers and distributors may also need to adjust pricing systems and logistics processes.

Consumers will gain access to a 10-cent refund on eligible wine and spirit bottles purchased after the expansion date. However, they may also face higher shelf prices if producer costs are passed through the supply chain. The final impact will depend on how wineries, distributors, and retailers manage the new fees and whether they absorb or pass on compliance costs.

There may also be operational questions for hospitality venues, events, cellar doors, and tourism operators. Businesses that handle large volumes of bottles could benefit from refund recovery, but they may also need systems to store, sort, and transport containers to refund points.

A Wider Test for Circular Economy Regulation

The debate highlights a wider policy challenge for circular economy regulation. Deposit schemes can increase collection rates, reduce litter, create cleaner recycling streams, and support local processing. These benefits are important for emissions and resource efficiency because keeping materials in use can reduce demand for virgin inputs and reduce the environmental footprint of packaging.

At the same time, circular economy policies can create new costs and compliance duties. When those costs fall unevenly across sectors, small producers, regional businesses, and lower-margin industries may feel the impact most strongly.

For net-zero and sustainability stakeholders, the Western Australian case shows why policy design matters. A well-functioning deposit scheme can support recycling and circularity, but implementation must account for sector-specific supply chains, regional business models, and the difference between theoretical recyclability and practical circularity.

The outcome may influence how other Australian jurisdictions structure similar expansions for wine, spirits, and other beverage packaging. If the WA government proceeds without major changes, the state could become an important test case for integrating wine bottles into a container deposit system. If it delays or adjusts the policy, it may signal that circular economy rules need more tailored approaches for industries with distinct packaging and distribution models.

Either way, the issue is likely to remain important for wineries, packaging suppliers, retailers, recyclers, and policymakers as the 2026 start date approaches.

Source: www.abc.net.au